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Mandatory online payment of excise duty and service tax

Written By Admin on Friday, 29 November 2013 | Friday, November 29, 2013

The Central Board of Excise and Customs (CBEC) made it mandatory for traders to make online payment of excise duty and service tax for amounts exceeding Rs 1 lakh from January 1, 2014. Earlier, those with dues of Rs 10 lakh and above were required to electronically pay their taxes.

Thus, from January 1, a manufacturer or a service taxpayer who has paid tax of more than

Rs 1 lakh in the previous financial year would be required to pay tax through internet banking.

CBEC said the move has been taken as a measure of trade facilitation and it is expected that increased coverage of e-payment would make it convenient for traders to pay taxes electronically.

Currently, service tax and excise duty are levied at 12 per cent. This means anybody with an annual turnover of more than Rs 9 lakh would have to pay taxes online. The present assessee base for excise duty is Rs 1,30,000, while it is Rs 7,00,000 for service tax. The threshold, the annual turnover below which traders are not required to pay taxes, is Rs 1.5 crore for central excise and Rs 10 lakh for service tax. “If a payment is made through a cheque, it takes a lot of time. Sometimes the cheque is not cleared. E-payment will make the process faster,” said a finance ministry official.

E-filing of service tax and excise duty will help the government make a smooth transition to the Goods & Services Tax (GST) regime. According to a report by global consultancy firm EY, 57 per cent of the 39 countries that provided information for their report required VAT/GST returns to be filed electronically, 35 per cent have an optional e-filing facility and eight per cent do not offer or require e-filing.

In order to reduce the transaction cost of the importers and expedite the time taken for Customs clearance, in 2012, e-payment of Customs duty was also made mandatory for importers paying an amount of Rs 1 lakh or more per transaction.

Earlier this year, the government had made electronic filing of returns mandatory for taxpayers with taxable income above Rs 5 lakh. Prior to that, those with income above Rs 10 lakh were required to file their returns in the electronic mode. This provision was introduced in the Budget for 2012-13.

Since about 80 per cent of the taxpayers who were not mandated to file e-returns were already doing so, the finance ministry thought of making it compulsory to include others in the category.

(Business Standard)
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